5. Responsibility

Accountability within the company’s management with regard to sustainability is disclosed.

The overall responsibility for the strategy on sustainability lies with the Management Board.

The steering committee monitors and oversees its sustainability activities. The steering committee consists of two members of the Management Board and managers from our Promotional Business, Treasury, Economics and PR, Risk Controlling and Facilities Management. The activities are being set in motion by our ESG team, which is made up of members from all relevant organisational units.

The coordination of the key sustainability strategy is located in the PR and Economics department, where this issue is being progressed by our Sustainability Officer. She coordinates the cross-departmental collaboration within the ESG team and the steering committee.

6. Rules and Processes

The company discloses how the sustainability strategy is implemented in the operational business by way of rules and processes.

The steering committee serves the divisional and departmental discourse and the management and further development of sustainability initiatives in corporate governance, banking business, banking operations and HR management. The steering committee has regular meetings.

Under the guidance of the Sustainability Officer, the ESG team entrenches sustainability activities in all organisational units. The ESG team is subdivided into various issue-related work groups which tend to be cross-divisional and cross-departmental:
The working group and the entire ESG team are developing proposals for decisions to be taken by a steering group and the Management Board, with particular regard to quantitative objectives and the embedding of management systems.

Rentenbank has set a Code of Conduct for all its staff. This forms the cornerstone of a legally compliant and ethically-oriented, sustainable corporate culture and is further supplemented by specific policies and internal rules for preventing criminal activities or accepting gifts and invitations. Employees can peruse all relevant policies posted on the Bank’s intranet.

7. Control

The company states how and what performance indicators related to sustainability are used in its regular internal planning and control processes. It discloses how suitable processes ensure reliability, comparability and consistency of the data used for internal management and external communication.

In order to control the implementation of the objectives of our sustainability programme and to be able to review the process, an appropriate set of indicators is to be developed for each of the four areas by the end of 2021. The data are being gathered from each of the respective organisational units and incorporated into the existing management system. In order to validate and carry out quality checks on the data, Rentenbank consistently applies (as with all data) the dual control principle and carries out control and quality tuning. The following indicators are currently being planned:

Sustainable management
Sustainable banking
Sustainable banking operations
Sustainable HR management

Key Performance Indicators to criteria 5 to 7

Key Performance Indicator GRI SRS-102-16: Values
The reporting organization shall report the following information:

a. A description of the organization’s values, principles, standards, and norms of behavior.

Since June 2012 Rentenbank has had a guiding principle in place which provides an orientation for a framework for action and the Bank’s basic principles for ethical and sustainable conduct. We subscribe to a sustainable development of agriculture and rural areas, the promotion of our own value creation, and social engagement as an employer and good corporate citizen. Rentenbank’s guiding principle contains the following promises and convictions:
Our code of conduct requires all our employees to act in a lawful and sustainable way, as well as with integrity. Furthermore, the code clarifies the ban on bribery and corruption and how to deal with invitations, gifts and other such benefits. Rentenbank also has guidelines on data protection and the prevention of corruption and other crimes as well as money laundering and funding of terrorism. All employees are trained on the content of these guidelines on an annual basis.

Rentenbank’s 'Guidelines for management and cooperation' reflect the basic principles for a respectful and appreciative collaborative environment.

8. Incentive Systems

The company discloses how target agreements and remuneration schemes for executives and employees are also geared towards the achievement of sustainability goals and how they are aligned with long-term value creation. It discloses the extent to which the achievement of these goals forms part of the evaluation of the top managerial level (board/managing directors) conducted by the monitoring body (supervisory board/advisory board).

All employees and the Management Board at Rentenbank are paid using fixed remuneration. The remuneration system does not contain any incentives to undertake any transactions or to take any risks outside Rentenbank’s existing statutory framework. Due to the fact that remunerations are fixed, there are no sustainability objectives in the remuneration system. Instead, the priority is the fulfilment of the promotional mandate.

Rentenbank's risk-averse business model, its public law status, its statutory promotional mandate and its competitive neutrality are also reflected in the Bank’s remuneration system.

The Members of the Management Board are remunerated in accordance with Rentenbank’s remuneration system and in line with their responsibilities. The following is an excerpt of Section 3 (6) and is enshrined in Rentenbank’s articles of association with regard to the amount of the Management Board’s remuneration: “The total remuneration of the individual members of the Board of Managing Directors shall be in line with their functions and the Bank’s financial position. The remuneration amounts shall be set by the Board of Supervisory Directors upon the proposal of the Remuneration Committee.”

Key Performance Indicators to criteria 8

Key Performance Indicator GRI SRS-102-35: Renumeration policies
The reporting organization shall report the following information:

a. Remuneration policies for the highest governance body and senior executives for the following types of remuneration:
i. Fixed pay and variable pay, including performance-based pay, equity-based pay, bonuses, and deferred or vested shares;
ii. Sign-on bonuses or recruitment incentive payments;
iii. Termination payments;
iv. Clawbacks;
v. Retirement benefits, including the difference between benefit schemes and contribution rates for the highest governance body, senior executives, and all other employees.

b. How performance criteria in the remuneration policies relate to the highest governance body’s and senior executives’ objectives for economic, environmental, and social topics.

Appointment bonuses (sign-on bonuses) are not paid as a rule.

Severance pay is granted in specific cases in accordance with established criteria. There is no differentiation in the criteria according to employee hierarchy/role.

Clawbacks are not applied due to the purely fixed remuneration system.

Retirement benefits: Our employees receive employer-financed pension benefits (defined benefit pension schemes) from the (Bank’s) relevant pension scheme applicable on joining. Longer-standing commitments are based on salary whereas newer commitments are contributions-based. No further differentiation between certain employee groups is made based on either defined benefit pensions or on contributions. There is a different regulation for members of the Management Board: They receive individual contracts, individual commitments which are each determined by pensionable salary components and length of service.

Within the context of the guideline on deferred compensation, members may waive portions of the fixed remuneration and may convert them into retirement benefit entitlements of an equivalent value. There is no distinction between employee groups.

The members of the Supervisory Board (the uppermost controlling body) receive an appropriate remuneration and payment for meetings. The following is from Rentenbank’s articles of association Section 12 (1) with regard to the amount: "Remuneration of the members of the Board of Supervisory Directors including remuneration for attendance at meetings shall be set in a resolution by the General Meeting; the resolution shall be approved by the Supervisory Authority. The remuneration shall account for the responsibility and scope of functions of the members of the Board of Supervisory Directors and the Bank’s financial position.  Chairmanship and deputy chairmanship in the Board of Supervisory Directors and chairmanship and membership in the committees are to be taken into account."

Key Performance Indicator GRI SRS-102-38: Annual total compensation ratio
The reporting organization shall report the following information:

a. Ratio of the annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median annual total compensation for all employees (excluding the highest-paid individual) in the same country.

The remuneration system is disclosed every year. It was most recently disclosed in the 2020 Disclosure Report in accordance with the Remuneration Regulation for Institutions (Institutsvergütungsverordnung).

Half of our employees are paid in line with collective pay agreements (as of 31 December 2020), while the other half are employees that are salaried above the tariff wage-scale.

Details about the remuneration of the members of the Management Board and the Supervisory Board are published every year in the Annual Report. Information on the remuneration of the Management Board and the Supervisory Board may be found on pages 71 and 72 of the 2020 Annual Report.

Individual employee salaries are protected as confidential information at Rentenbank, so submission for statistical purposes is limited.

9. Stakeholder Engagement

The company discloses how the socially and economically relevant stakeholders are identified and integrated into the sustainability process. It states whether and how an ongoing dialogue takes place with them and how the results are integrated into the sustainability process.

Rentenbank is in continuous dialogue with all stakeholders relevant to our business. A communications work group identifies stakeholders through an analysis of our stakeholders containing the following questions:
The communications work group has generated the following outcomes, which were approved by the Management Board:
Key communication channels with stakeholders can consist of discussions with banks, client events, meetings of the Management Board and General Meeting, specialist events and exhibitions as well as PR activities (press releases, website, annual reports, presentations, and surveys). Outcomes from dialogues with stakeholders are discussed by our experts in work groups and any actions points are submitted to the steering committee.

In 2020, Rentenbank got in touch with its stakeholders regarding sustainability via the following communication channels:
As part of Rentenbank’s ESG projects, we monitor how our stakeholders’ needs and ideas can be better captured and how the participation process can be expanded. The continuous communication with its stakeholders boosts the development of our sustainability strategy. Rentenbank gains from the knowledge and experience of its stakeholders and faces up to critical issues.

Key Performance Indicators to criteria 9

Key Performance Indicator GRI SRS-102-44: Key topics and concerns
The reporting organization shall report the following information:

a. Key topics and concerns that have been raised through stakeholder engagement, including:
i. how the organization has responded to those key topics and concerns, including through its reporting;
ii. the stakeholder groups that raised each of the key topics and concerns.

After an intensive exchange with our stakeholders, we have come to the conclusion that sustainability in the sense of durable economic use of natural resources for the long term has always been at the heart of Rentenbank’s promotional mandate and its business model. In view of the current regulations and new requirements e.g. from investors and ESG ratings agencies, we are now focusing on making these activities more systematic and defined in addition to ramping up our communications in line with recognised standards.

To this end, we initiated an ESG project across the entire bank. Two members of the Management Board and Management Team from all relevant organisational units are in the steering committee.

Measures we have implemented at the instigation of our stakeholders include the development of a Green Bond Framework and the issuance of our Benchmark Green Bond, the (voluntary) publication of our non-financial report (as a precursor to this Sustainability Declaration and a planned independent Sustainability Report), an updated version of our code of conduct for employees with increased focus on sustainability issues and its publication, as well as the increase in the amount of information relating to sustainability issues available on our website.

10. Innovation and Product Management

The company discloses how innovations in products and services are enhanced through suitable processes which improve sustainability with respect to the company’s utilisation of resources and with regard to users. Likewise, a further statement is made with regard to if and how the current and future impact of the key products and services in the value chain and in the product life cycle are assessed.

Promoting sustainability within Rentenbank’s special promotional loans business
We support sustainable investments in agriculture with special promotional programmes and an interest rate bonus (best rates). As part of our Sustainability, Forestry and Environmental and Consumer Protection programmes, we support a broad spectrum of measures to improve animal welfare and energy efficiency, and to reduce emissions. These programmes aim to promote organic farming, sustainable forest management, such as restructuring forests into mixed forests which are suited to climate change, and the direct or regional marketing of agricultural products. Our Rural Energy promotional programme promotes the expansion of renewables. We focus on promoting investments made by farmers in wind and photovoltaic power stations and biogas plant funding and community wind farms in rural areas. Quantitative effects from our special promotional loans business for the end borrower are currently not collated as local banks are in contact with the end borrowers. However, we are working with scientific partners on a system which could collate and assess such impacts, such as cost savings effects through the switch from old to new machinery. Impacts on our special promotional loans business are captured and categorised qualitatively into SDG categories (cf. criterion 2)

Promoting innovation
Innovation and technical progress are key to tackling the challenges agribusiness faces in becoming more sustainable. These factors will safeguard the sector’s competitiveness and, at the same time, facilitate the careful use of resources, particularly where more stringent standards are being imposed regarding animal welfare, product quality and environmental protection. That is why we support the entire innovation process from development to delivery and the wider use of these innovative processes and products.

The innovative projects we financed in 2020 include those which are aimed at improving animal welfare, increasing the use of state-of-the-art mechanical weed control with the aim of reducing the use of pesticides, increasing the biodiversity of agricultural landscapes, and reducing microplastics. Further information and examples of projects we support are outlined in our Annual Report

Commitment to climate and species protection through ecological forest management
We also initiate and undertake projects which make an important contribution to sustainability and climate protection. This is in addition to our special promotional loans business and our focus on sustainability in our promotion of innovations. Our innovation projects are making an important contribution to sustainability and are closely linked to agriculture, forestry and rural areas. 

Rentenbank’s forest project, which started in 2016 in collaboration with the Institute for Federal Real Estate (Bundesanstalt für Immobilienaufgaben, BImA), is such an example. The long-term ecological cultivation of 550 hectares of forest in the district of Wetterau in Hesse is at the heart of a framework agreement. In addition, BImA runs several projects on this land to further enhance habitats. Six projects have already been launched. The achievements made so far were awarded the 'Tree of Diversity' prize on 13 October 2020 as a 'UN Decade Project'.

Innovations for sustainable funding
Rentenbank issued its first EUR 50 million Renewable Energy Bond back in 2013. Since then, the Bank has established a close connection between its sustainable promotional programmes and its funding on the international capital markets with additional issuances of green bonds.

Rentenbank issued its first public Green Bond in autumn 2020. We allocated the benchmark bond’s entire issuance volume of EUR 1.75 billion to promoting renewable energy. Rentenbank’s Green Bond Framework is consistent with the ICMA Green Bond Principles (International Capital Market Association). The Framework is backed by a loan portfolio which currently comprises more than 2,000 financed wind power projects and around 21,500 financed photovoltaic projects. These investments are mostly carried out by agricultural companies. In 2020 alone, the Center for Solar Energy and Hydrogen Research (Zentrum für Sonnenenergie- und Wasserstoff-Forschung Baden-Württemberg, ZSW) calculated a saving in CO2 of almost 5 million tonnes through the investments we supported within the loans portfolio in our Green Bond Framework.

Credit portfolio
In addition, Rentenbank provides funding for other banks, savings banks, cooperative banks and local authorities operating in rural areas through registered bonds, promissory notes and securities. It is purely a portfolio of bonds. Rentenbank's risk policy requires a prudent selection of business partners and products in all business activities, although in accordance with its core competencies, Rentenbank focuses on banks and public sector borrowers. Transactions with banks or other counterparties which could harbour major risks to Rentenbank’s reputation are not entered into.

Involvement of additional actors for innovation and product management
At workshops, seminars and presentations, we present our promotional offering to our business partners, borrowers and advisers on agricultural matters at banks and savings banks. Our training sessions at commercial banks, federal states’ development banks (Landesförderinstitute) and intermediary institutes are received with keen interest.

Key Performance Indicators to criteria 10

Key Performance Indicator G4-FS11
(report also in accordance with GRI SRS): Percentage of assets subject to positive and negative environmental or social screening.(Note: the indicator should also be reported when reporting to GRI SRS)

We do not currently monitor a percentage of assets subject to positive and negative environmental or social screening.

Rentenbank is in the process of reviewing how it can more tightly integrate ESG criteria in the future.
Volumes of promotional programmes
Volumes of promotional programmes 
In the 2020 reporting year, we funded investments in environmental, animal and consumer protection in the amount of EUR 337.3 million in total (EUR 321,0 million in 2019). This includes investments in organic farming that amount to EUR 83.6 million (EUR 84.0 million in 2019). A funding volume of EUR 81.7 million has been put towards investments in humane systems of animal husbandry (EUR 118.8 million in 2019). We funded sustainable initiatives totalling EUR 1.2 billion (EUR 1.2 billion in 2019), which included our funding for renewable energy. As a result, a fifth of our new business in special promotional loans went into sustainable investments at our best rates.